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Year-End Tax Planning Checklist 2024

Tax Advice for Businesses and Self-Employed - 2023/24 Tax Planning

A person is writing on a checklist with a pen.

As the tax year ends on 5 April 2024, it is important to ensure you have made all possible efforts to reduce your tax bill. We have devised this checklist  to help individuals and businesses plan effectively and utilise available allowances and reliefs. It is essential to consult with a tax professional to customise a plan that suits your specific circumstances and to ensure compliance. Use the contact form on the right and a member of our team will be in touch to organise a free 15 minute consultation with one of our Tax Managers. 

All recommendations based on the tax rules as of 19 February 2024.

Usage of Allowances

Different allowances are available that can help you reduce your tax liability and get the most out of your money.

  • Personal Allowance (PA): It is vital to consider steps to ensure your income does not exceed £100,000 to maintain your PA.
  • Savings Allowance: Take advantage of the £1,000 allowance for basic rate taxpayers and £500 for those on a higher rate.
  • Dividend Allowance: Utilise the current £1,000 allowance and prepare for the reduction to £500 starting from 6 April 2024.
  • Starting Rate for Savings: If your other income is below £12,570, consider the £5,000 starting rate for savings.
  • Marriage Allowance: Consider transferring £1,260 to your spouse if you both are basic rate taxpayers to utilise this benefit effectively

Personal Tax 

Checking that your income is being taxed at the correct rate and you are taking advantage of every allowance is vital – especially as you approach higher tax bands.

  • Additional Rate of Tax: Prepare for the lowered threshold from £150,000 to £125,140 for the additional rate of tax.
  • High-Income Child Benefit Tax Charge: Be vigilant about how your income above £50,000 affects your child benefit due to this tax charge.
  • Gift Aid: Use Gift Aid donations to effectively extend your basic rate band.
  • PAYE Notice of Coding: Ensure that your 2024/25 coding is correct to prevent paying excess tax.
  • Inter-Spouse Transfers: Utilise transfers between spouses to even out income and maximise individual allowances and bands.
  • OMB Remuneration Strategy: Re-evaluate your profit extraction strategies in light of recent tax changes.

Pension

Pensions help you retire comfortably and on time: make sure you are contributing efficiently and remain aware of any changes to thresholds and allowances.

  • Maximise Pension Contributions: Ensure you are using your annual contribution limits entirely.
  • Pension Allowance Brought Forward: Take advantage of unused allowances from the past three years.
  • Employer Contributions: Consider the benefits of salary sacrifice for future pension contributions.
  • Family Member Contributions: Consider contributing to pension schemes for non-earning family members.
  • Lifetime Allowance (LTA): Review the implications of the LTA charge abolition practical from 6 April 2024.

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Investment Ideas

Investing sensibly is a great way to reduce your tax bill: always seek professional advice before making an investment.

  • Individual Savings Account (ISA): Maximise your £20,000 annual allowance.
  • Junior ISA: Consider setting up or contributing to a Junior ISA for your children, with a limit of £9,000.
  • EIS, SEIS, VCT, and SITR: Explore these tax-efficient investment vehicles for potential benefits.

Capital Gains Tax

Capital gains tax can be high if appropriate reliefs are not taken advantage of.

  • Annual Exemption (AE): Use your £6,000 exemption and prepare for its reduction to £3,000 next year.
  • Inter-Spousal Transfers: Transfer assets between spouses to utilise each other’s AE or offset losses.
  • CGT Reliefs: Investigate reliefs such as Business Asset Disposal Relief and Private Residence Relief to reduce tax liabilities.

Inheritance Tax Planning

  • Annual Exemption: Use your £3,000 exemption, and remember that any unused exemption can be carried forward one year.
  • Normal Expenditure Out of Income: Make regular gifts out of your income without incurring inheritance tax implications.
  • Gifts on Marriage: Make the most of the exemptions based on the relationship between the donor and recipient.

Long-Term Planning

  • Inheritance Tax Planning: Consider using trusts and family investment companies for effective tax planning.
  • Review of Tax Efficiency of Will: Make sure your will is structured in a tax-efficient manner.
  • Succession Planning: Develop a plan for transferring your business and understand the associated tax implications.

Remember, for any complex tax matters or for personalised advice, it is a good idea to consult with a professional. You can contact Jack Ross Chartered Accountants at 0161 832 4451 or by using the contact form below to book a free no-obligation introductory meeting with one of our tax advisors.

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